JSE pushes higher despite further signs of economic weakness

The JSE brushed off dismal local data on Wednesday, with Naspers leading the gains followed by banks and financials, while retailers slipped 1.6%.

Resources shares came under pressure from a firmer rand, while volumes on the local bourse were well below average for a third consecutive day.

Retailers were under pressure after data for that sector came in well below expectations, although banks gained on a firmer rand.

The local unit found support from disappointing economic data out of both the UK and eurozone.

Retailers suffered from local economic data, which once again underscored the fact that SA’s economy has not performed as well as was hoped in the early part of 2018.

Retail sales growth reached just 0.5% in April compared to the same period in 2017, well below the 4% expected by economists.

While the numbers were disappointing, as consumer spending contributes about 60% of GDP, activity was still expected to pick up through the course of 2018, said Nedbank Group Economic Unit analysts.

After surging from 34 to 45 in the first quarter, the RMB-BER business confidence index (BCI) deteriorated to 39 in the second quarter of 2018 — a sign that the confidence boost resulting from the election of Cyril Ramaphosa as president was wearing thin.

“A striking deterioration in demand knocked manufacturing confidence from 37 to 27 in the second quarter — a drop that almost wiped out all of the improvement in sentiment in the first quarter,” RMB said.

Global markets were generally firmer, although the Dow opened flat, in cautious trade.

The US Federal Reserve is expected to announce its latest stance on monetary policy at 8pm SA-time, with some analysts saying the dollar’s reaction to recent events appears to have been subdued ahead of the Fed statement.

The all share gained 0.39% to 58,437.2 points and the top 40 0.56%. Banks added 1.2% and financials 0.68%. Platinums fell 1.48% and general retailers 1.61%.

Diversified miner Glencore gained 3.65% to R70.38, after it emerged earlier that a subsidiary in the Democratic Republic of Congo had reached a legal settlement dissolving a joint venture with that country’s state miner.

Anglo American fell 1.02% to R318.30.

Sibanye-Stillwater lost 4.29% to R8.47, amid continued scrutiny of the safety of its operations following mine worker deaths.

Naspers, which jumped 5% intraday trade, closed 1.23% higher at R3,393, after earlier saying it expected headline earnings per share to rise by between 130% and 135% in the year to end March, when compared to the prior year’s results.

Peregrine Holdings jumped 5.95% to R21.18, after earlier saying headline earnings per ordinary share rose 4% to 238.5c in the year to end-March.

Grindrod plummeted 33.59% to R8.48, having earlier separated its shipping business into a Nasdaq-listed company. Grindrod shareholders will be compensated with a special dividend.

Aspen Pharmacare rose 3.07% to R273.13.

Shortly after the JSE closed the Dow was flat at 25,330.44 points. In Europe, the CAC 40 and FTSE 100 were also little changed, while the DAX 30 was up 0.19%.

At the same time gold had gained 0.11% to $1296.78 an ounce and platinum 0.1% to $901. Brent crude was 1.28% higher at $76.45 a barrel.